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CU System

More CUs step in to fill car loan gap

DENVER and NEW YORK (12/31/08)--Two newspapers--one in Denver, the other in New York City--are reporting credit unions stepping in to fill the financing gap left by other lenders in the auto loan market during the recession. New-auto sales fell an unprecedented 37% in 12 months through November. But “credit unions are holding up the Colorado auto market,” according to a Tom Wilber, a Denver area Ford dealer’s finance director (Denver Post Dec. 29). In the past credit unions typically financed about 20% of the vehicles sold. In recent months, they’ve financed half or more, said Wilber. Credit unions’ share of auto loans registered in Colorado was 42.9% at the end of the third quarter, up from 32.1% at the end of first quarter, according to Centennial-based CU Direct Connect, which links borrowers with credit unions. The article notes that credit unions’ conservative nature in lending kept them from winning a larger part of the market share in the past but left them able to lend in today’s tight market. An auto broker in Centennial noted that people who haven’t used credit unions for auto loans in the past are beginning to use them. New York Daily News (Dec. 29) noted that the economy has brought an abundance of deals on new and used cars. Although it’s a tough time for business, it’s a great time for consumers who have a steady job and solid credit scores, said a spokesman for the Greater New York Automobile Dealers Association. “If your credit isn’t perfect, you could consider alternative possible sources of financing like credit unions—or ask your local new-car dealer for help,” the article says. To read both articles in full, use the resource links.